Updated from 5:23 p.m. EDT

AOL Time Warner

(AOL)

met financial targets Wednesday and said it would restate revenue and cash flow figures at its America Online unit following a review of accounting practices there.

Chief Financial Officer Wayne Pace said AOL Time Warner's 2002 free cash flow would likely exceed expectations. But he added that the company would likely have to take a noncash charge for the year to reflect "substantial impairment" of intangible assets. AOL Time Warner already took a

$54 billion charge earlier this year to cover such impairment, but Pace didn't give any hint of the size of the impending charge.

For the third quarter ended Sept. 30, the multimedia conglomerate reported revenue of $9.98 billion, up from the pro forma figure of $9.42 billion a year earlier. Analysts surveyed by Thomson Financial/First Call had forecast sales of $9.93 billion.

Earnings before interest, taxes, depreciation and amortization -- a common bottom-line yardstick for media companies -- fell 1% to $2.17 billion, within analysts' expectations. Cash earnings per share -- pretax income excluding noncash amortization but including cash paid for taxes -- fell to 19 cents from 24 cents a year earlier, a penny above expectations.

Checking out the bottom line, AOL Time Warner said third-quarter earnings amounted to $57 million, or 1 cent a share, down from $395 million, or 9 cents a share, on a comparable year-ago basis. AOL said third-quarter companywide "normalized free cash flow" was $1.4 billion, but that America Online's EBITDA declined 30% in the quarter on revenues that fell 7%.

"Except for America Online, all of our businesses are doing quite well," AOL Time Warner CEO Dick Parsons told analysts in a Wednesday conference call.

Ahead of the earnings announcement, shares rose 3 cents to close at $13.53. Shares jumped 57 cents higher in after-hours trading.

The company also said a review of its accounting practices at the America Online division would result in the restatement of $190 million in revenue and $97 million in ebitda for eight quarters ending this summer. Those subtractions -- which Parsons said followed a review of transactions covering 70% of advertising and commerce revenue in the periods in question -- amount to 3.4% of advertising and commerce for those quarters and 1.9% of ebitda.

Advertising sales at America Online continue to be anemic. Of the $267 million in advertising revenue the unit claimed for the quarter, $164 million represented contractual commitments left over from the dot-com boom. By comparison,

Yahoo!

(YHOO)

, which says it has run through all of its legacy advertising sales, reported advertising revenue of $147.4 million for the Sept. 30 quarter.

On the bright side, Pace said the online unit had been able to convert 1.1 million AOL subscribers into full-freight paying customers, helping AOL raise average subscription revenue per subscriber.

Executives begged off providing details of plans to turn around the online division, saying that such plans were in the works and that they would make a relevant presentation to Wall Street on Dec. 3.

Going into the fourth quarter, Pace reminded analysts that the company needs a strong ebitda improvement -- a percentage increase somewhere in the mid-teens -- to meet forecasts for the year. But he cited several trends and forthcoming events bolstering the company's outlook. The TV networks division, for example, is seeing scatter market prices that exceed the upfront market's levels by 10% to 20%.

AOL Time Warner said it expects full-year revenue growth within the previously announced 5% to 8% range and full-year ebitda growth at the low end of the previously announced 5% to 9% range.